Thursday, February 9, 2012

Thursday, February 9, 2012

Have We Protected Poor Students from Debt?

Administrative hand-wringing over access has been focused on the giant hole in the income donut where dwell "middle class" students with family incomes of between around $80,000 and $150,000 per year. For example, UC President Mark Yudof recently assured the anti-tax California Chamber of Commerce that UC's Blue and Gold plan makes UC tuition free for all students with family incomes under $80,000, effectively covered the $1,890 tuition increase in 2011-2012 for families making under $120,000, and in general makes average net tuition at UC only $4,000, or about a third of the current sticker price. In December, UC Berkeley announced a Middle Class Access Plan (MCAP), designed to help those same Middle Earth students with family incomes in the $80,000-140,000 donut hole.

So why, when I was at UC Riverside to give a budget talk three weeks ago, were students trying to show the Regents signs like this?

Here's the simple picture that illustrates the problem:

This chart is from the College Board's Trends in Student Aid 2011. It shows that low-income students borrow almost as much as do middle-class students. In 2008 low-income Pell Grant students, who in some accounts have it good, "had an average debt of $24,800—nearly $2,000 more than the average for all seniors graduating with loans." The authors of Crossing the Finish Line, with their uniquely comprehensive data base, confirm this pattern and show that students from the bottom income quartile increase their annual borrowing by 50% from their first to their last year in college (chapter 9). Low-income students are going broke as fast as middle-income students. Actually, given their lower income base, they're going broke even faster.

What about all that grant income that supposedly wafts poor students along? It doesn't close the funding gap between financial aid for tuition and related expenses and the overall cost of attendance. As background, take Berkeley's MCAP plan, which estimates Berkeley's cost of attendance as $32,000 per year. In the new scheme, a student from a family grossing $80,000 pays net tuition of $8,000 and the family contributes a maximum of 15% of their gross income or $12,000. The university comes up with the missing $12,000 ($4,000 coming from the existing return-to-aid program). And yet the student and her family still pay $20,000 a year—a quarter of their gross income. This requires the borrowing that appears in the College Board's data.

Median family income in California was not quite $55,000 in 2010 (slide 9). Let's say that a student from this median family—certainly not technically poor—has all tuition covered through a partial Pell Grant combined with a Cal Grant (at least until Jerry Brown messes with it again.) This saves another $8,000. The student and her median family then need to find $12,000 per year. Factor in this family's net income in relation to California mortgage or rent costs and just one other child in the family and their capacity to contribute disposable income rapidly approaches zero. A student borrowing $4,000-5,000 per year for four or five years will rack up the total debt seen in the chart. UC President Mark Yudof recently noted the debt figure for UC is close to $20,000.

When public university officials claim that access for low-income students is guaranteed by grants, they wrongly omit the overall cost of attendance. This may have the negative effect of reducing public interest in fixing the whole access problem.

President Yudof charging Californians higher tuition is not protecting middle income family accessability to University of California.University of California Berkeley Chancellor Birgeneau has made Cal. the most expensive public university in the USA

Help with tuition is fine, but students still must pay for room and board on campus, or rent and food off campus. And books of course, which are criminally expensive. I am a faculty member at a UC campus and I thank my lucky stars that my son goes to an Ivy league college. We can afford Harvard, but not UC.

Access, affordability to University is farther and farther out of reach. University of California Berkeley Chancellor Robert J Birgeneau is outspoken on why elite public Cal. should ‘charge Californians much more’. Number 1 ranked Harvard is now less costly (all in costs) than Cal. UC Berkeley tuition rising faster than costs at other universities. Birgeneau’s ‘charge more’ makes Cal. the most expensive American public university!

Birgeneau ($450,000 salary) likes to blame the politicians, since they stopped giving him every dollar expected. The Chancellor’s ‘charge Californians more’ tuition skyrocketed fees by an average 14% per year from 2006 to 2011-12 academic years. If Birgeneau had allowed fees to rise at the same rate of inflation over the past 10 years they would still be in reach of most middle income students. Disparities in higher education defeat the promise of equality of opportunity for Americans. A sad, unacceptable legacy for students, parents, politicians.

Additional funding should sunset. The economic downturn is devastating California. Simply asking taxpayers for more money to fund inept Cal leadership, old expensive higher education models and support burdensome faculty, chancellor salaries/benefits is not the answer.

UC Berkeley is to maximize access to the widest number of Californians at a reasonable cost: mission of diversity and equality of opportunity. Birgeneau’s and Provost George Breslauer’s ($306,000 salary) ‘charge Californians more’ tuition denies middle income Californians the transformative value of Cal’s higher education.